Women's Top Money Fears And Seven Steps To Overcome Them

According to Prudential Financial’s latest biennial study of women and money released this month, 53% of women are now financial breadwinners due to out-of-work partners, divorce and later marriages. However, women reported being more concerned than men about household expenses, debt and their ability to save for retirement. They were also found to be more risk-averse and afraid of becoming burdens to their families.

“It’s increasingly important for women to be responsible for their own long-term financial health,” says Michelle Matson, author of Rich Chick and vice president of Matson Money, a Cincinnati-based investment advisory firm managing over $3.1 billion. Women’s median income has grown 63% in the last three decades, and they are expected to control $22 trillion in wealth by 2020. Furthermore, Matson says the average age of widowhood is 56, while women’s average life expectancy is 80.8 years. “We need to be able to handle this without deferring to a spouse.”

Matson says women’s biggest fear is that they don’t know enough and will fail. “There’s so much information it can be overwhelming,” she says. With the rapid-fire pace of news and many conflicting messages, she says women often become intimidated and feel they have to be smarter than everyone else to succeed. While men may be motivated by the thrill and challenge of investing, Matson says women are more concerned with the long-term results.

To overcome their fears, Matson says women should take one baby step at a time and bolster their confidence through understanding and ongoing reinforcement. Here are seven small changes that make a big impact.

Start Today

Matson says women often suffer from the “bag lady syndrome,” the fear of being penniless, homeless and alone. They may escalate small money concerns into visions of total destitution. “It can paralyze you,” she says. “You don’t know what to do, so you don’t do anything.” However, the easiest way to overcome a fear is to face it. She advises women to stop procrastinating, and start focusing on their financial health today. It could be as simple as expressing to your partner that you’d like to learn more about your finances, or scheduling time on your calendar to review where you currently stand.

Wade In Slowly

“Dipping your toe in will give you more confidence,” says Matson. Instead of trying to get up to speed in a week, she suggests moving slowly to learn and really understand your financial plan. For those who need to get familiar with the basics, an easy-to-read financial book is a good starting point. Some, like Matson’s Rich Chick, Women & Money by Suze Orman and Does This Make My Assets Look Fat? by Susan Hirshman, are written specifically for women and may be more digestible. Another easy entry point is locating and reading all of your financial statements to get a snapshot of your current accounts.

Identify Goals

“You need to dig deep enough to know where you’re going and why,” Matson advises. Money is a tool, and long-term financial planning is a means to an end. Establishing a vision of the future helps to set realistic goals to achieve it. Perhaps your goal is to buy a home or own your home outright. Maybe you want to retire early or retire with enough set aside to continue your current standard of living. Once you understand where you are and identify where you want to be, you can create a plan for getting there.

Matson says many women get too comfortable knowing there’s a strategy in place without taking the time and effort to understand what that strategy is. “It shouldn’t be a mystery,” she says. “If you understand, you can make it work long term.” Matson adds that men don’t necessarily make better investing decisions, but they are more likely to seek out the information that will guide their decisions. More understanding leads to more confidence and generally better results.

Keep Interviewing Your Financial Advisor

According to the Prudential survey, 35% of women use a financial advisor and a significant portion who don’t would consider doing so. Matson says women must take responsibility for this relationship and ensure they understand all actions and communications. “The big thing to look for in a coach is how much education and information they are providing you so that you understand the strategy,” she says. Consistently ask a lot of questions and know why they are recommending something. A good advisor will take the time to explain and answer questions. Matson also notes that while it’s important to ask questions when choosing an advisor, it is equally important to continue asking questions.

Take A Financial Class With A Friend

“It’s important to feel like you’re not alone,” says Matson. Instead of making it a chore, turn learning about money into something that’s fun. She recommends joining a program with a friend. Not only will you learn through the program, you’ll reinforce the knowledge by discussing it with your companion. Plus, it will give you more incentive to stick with it. “Having someone with you keeps you going,” she says. You can also employ the buddy system by taking all of these steps with your partner and learning together.

Teach Money Basics To Your Kids

Sometimes the best way to learn is to teach. “Teaching your kids financial responsibility is one of the big ongoing challenges of parenthood,” says Matson. By explaining to your children the basics of money, your financial philosophy and your long-term plan, you provide them with necessary money skills while also clarifying the concepts for yourself. And it shouldn’t be a one-time lecture. Work these conversations into your daily life—at the register when you use a credit card or at home when you’re paying the bills. Consistent reinforcement of these ideas increases both financial understanding and confidence.

I spent five years at Forbes writing about business and leadership, attracting nearly one million unique visitors to Forbes.com each month. While here, I assistant edited the annual World’s 100 Most Powerful Women package and helped launch and grow ForbesWoman.com. I've app...